Bullion & Business Weekend Recap – May 8, 2010

New York gold futures ended the week at a five-month high — above $1,210 an ounce — and registered a third straight week of gains. Gold rose in large part due to safe-haven buying as concerns over euro-zone debt woes widened.

Other metals tumbled on worries industrial demand would weaken should the European crisis spread and jeopardize a global recovery, although silver followed gold’s coattails and rallied nearly $1 on Friday to pair its weekly losses.

On those same concerns mostly, crude oil plummeted to near $75 a barrel and suffered its biggest weekly decline in 16 months.

European and U.S. stocks fell for a second straight week — again, debt crisis concerns cited as a catalyst. Worse for investors, major U.S. indexes not only fell for the week, but they gave up all of their 2010 gains.

In New York precious metals weekly prices, June gold jumped $29.70, or 2.5 percent, to close at $1,210.40 an ounce. The yellow metal reached a high of $1,214.90, which was the highest level since Dec. 4

"Gold is the first level of safe-haven appeal," Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago, said on Bloomberg. "There’s a lot of fear out there, and who knows where the next shoe will drop? People want to be in something tangible coming into this weekend."

"Fear is the thing driving gold," said Darin Newsom, senior analyst at Telvent DTN in Omaha. People realize that Europe could bring the economic recovery to its knees, MarketWatch recounted, with Newsom adding "Everything is linked, we cannot say the ocean protects us."

New York silver for July delivery declined 19 cents, or 1.0 percent, to $18.451 an ounce. July platinum fell $79.30, or 4.5 percent to $1,665.80 an ounce. June palladium tumbled $45.55, or 8.2 percent, to $510.20 an ounce.

"As a currency hedge and non-correlated asset, gold provides diversification as people are worrying about the euro, sovereign debt and the impact to the euro zone," Dan Denbow, co-manager of the USAA Precious Metals and Minerals Fund USAGX.O, which has $1.56 billion in mutual fund assets, said on Reuters. "When you see the dollar and gold moving together, that’s a real indicator of safe-haven trade."

"For the moment, gold bulls do not appear to be too preoccupied by the fast-thinning gold-buying crowds over in India," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "The amount of potentially lost gold sales during this month in that country was seen as already being offset by yesterday’s 19.78 tonne addition to the holdings in the SPDR Gold Trust (to 1185.79 tonnes) as funds scrambled to pile into the precious metal. "

London Fix Charts: Silver, Gold, Platinum and Palladium

(April 30 – May 7)

The London Fix is one of the most used bullion quotes around the world. The London AM fix for gold and platinum begins at 10:30am GMT (5:30am in New York), and the PM fix begins at 3pm GMT (10am in New York). The London Fix for silver begins each business day at 12pm GMT (7am in New York).

London Fix Precious Metals Prices

(April 30 – May 7)

Up

Down

Week % Change

Week $ Change

Friday Close

Silver

X

-4.9%

-$0.92

$17.700

Gold

X

2.0%

$23.00

$1,202.25

Platinum

X

-5.0%

-$87.00

$1,651.00

Palladium

X

-8.5%

-$47.00

$505.00

(April 23 – 30)

Up

Down

Week % Change

Week $ Change

Friday Close

Silver

X

4.1%

$0.73

$18.620

Gold

X

3.5%

$39.75

$1,179.25

Platinum

X

0.8%

$13.00

$1,738.00

Palladium

X

-0.5%

-$3.00

$552.00

(April 16 – 23)

Up

Down

Week % Change

Week $ Change

Friday Close

Silver

X

-2.5%

-$0.46

$17.890

Gold

X

-1.0%

-$12.00

$1,139.50

Platinum

X

1.0%

$17.00

$1,725.00

Palladium

X

4.3%

$23.00

$555.00

(April 9 – 16)

Up

Down

Week % Change

Week $ Change

Friday Close

Silver

X

0.1%

$0.01

$18.35

Gold

X

-0.1%

-$1.00

$1,151.50

Platinum

X

-0.6%

-$10.00

$1,708.00

Palladium

X

4.1%

$21.00

$532.00

(April 1 – 9)

Up

Down

Week % Change

Week $ Change

Friday Close

Silver

X

3.7%

$0.65

$18.34

Gold

X

2.6%

$29.00

$1,152.50

Platinum

X

3.5%

$58.00

$1,718.00

Palladium

X

4.1%

$20.00

$511.00

*Week change numbers are for Friday PM-Friday PM (Unless a time is closed for holidays)

World Business News: Oil, Gasoline, and Stocks Prices

Oil prices fell for a forth straight day on Friday "following the sharp sell-off on Wall Street and on worries that the euro zone’s debt crisis will derail the global economic recovery," wrote Gen Ramos of Reuters.

"The oil market was overdue for a shakeout like this," Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut-based procurement adviser, said on Bloomberg. "Eighty-seven dollars certainly wasn’t a justifiable level based on the fundamentals and if you start thinking about the potential ramifications for economic growth of what’s happening in Europe."

New York crude oil for June delivery lost $2.00, or 2.6 percent, to close at $75.11 a barrel. Oil prices tumbled for the week, dropping $11.04, or 12.8% — the biggest weekly loss since Dec. 19, 2008.

Prices at the pump fell two-tenths of a cent between Friday and Saturday. The national average for regular unleaded gasoline is $2.920 a gallon, according to a AAA fuel report. The price is 3.5 cents higher than last week, 6.4 cents more than a month back, and 75.1 cents higher than a year ago.

U.S. stocks stumbled Friday, "with the three major indexes ending in negative territory for the year as investors mulled the Greek debt crisis and the aftermath of one of the most gut-churning days in Wall Street history," wrote Alexandra Twin of CNNMoney.com.

"We have a massive debt bubble globally and it’s going to take a decade or more to get back to reasonable, sustainable levels," George Feiger, chief executive officer of Contango Capital Advisors Inc., which oversees about $1.7 billion in San Francisco, said on Bloomberg. "There’s this deep need to believe that the problems are over but the old system, the old opportunities, aren’t coming back, at least not for many years."

"The real danger here is that [Greece] will turn into a greater liquidity crisis," portfolio manager Kevin Shacknofsky, of Alpine Closed-End Funds, said on MarketWatch. "We’ve been moving our portfolios out of small and midcap stocks and into megacap stocks. You figure that if anything goes really wrong, those really big names will be able to weather it better and that you’ll actually be able to trade them."

Friday closing figures for the three major US indexes follow:

The Dow fell 139.89 points to close at 10,380.43.

The S&P declined 17.27 points to finish at 1,110.88.

The NASDAQ lost 54.00 points to end at 2,265.64.

Stocks plummeted for the week with the Dow falling 5.7 percent, the S&P losing 6.4 percent and the Nasdaq dropping 8.0 percent.

Bullion and Business Articles

In related bullion, business and United States Mint news, interesting or quick-read articles from the week include:

There’s Got To Be A Morning After… – Jon Nadler, Kitco Metals Inc.
Following one of the scariest market afternoons in recent (and not so recent) memory, global investors tried to get up, dust off, and get on with it as Friday morning dawned across various time zones. Images of the Dow’s chart, which resembled a cross-section of the Mariana Trench in the western Pacific, continued to flash across various financial channel screens this morning.

Such images stood as a stark reminder that whether this event was about spreading fear, a hapless market employee, computers gone haywire, or all of the above at once, the results are one and the same; a lot of damage (financial and psychological) was inflicted on Thursday. The reverberations of the incident will continue to plague the psyche no matter how promising any Friday recovery may eventually turn out to be.

Gold prices returned to under the $1200 mark early this morning, as their after-hours rise to five-month highs above that round figure on the back of spreading fears about Greek contagion and the Dow’s ‘air pocket incident’ prompted profit-takers to do just that…

Gold Coins Jump as Gold Prices Hit 2010 HighsThe latest United States Mint sales report reveals that gold coins, silver eagles and silver proof sets were the hottest products last week. Most other US Mint offerings moved along almost sluggishly.

Bullion American Gold Eagles edged up to 349,000 for the year, and closed April with 60,500 sold. More excitement was found with bullion American Buffalo Gold Coins. They hit 56,500 in their two-day April debut — pulling 48,500 on the first day alone. They are already sitting at 70,000, which is 21.7% of the number sold in their initial 2006 year, 41.8% of their 2007 total, 40.7% of the sales in 2008 and 35.0% of the 2009 level.